Recent data indicates that U.S. business executives are reassessing early recession predictions, which surged following President Donald Trump’s tariff announcements. A survey released on Monday shows that fewer than 30% of CEOs now expect either a mild or severe recession in the next six months, a significant drop from 46% in May and 62% in April, as reported by the Chief Executive Group.
Furthermore, the number of CEOs anticipating some level of economic growth in the U.S. has increased to over 40%, nearly doubling from the 23% reported in April.
Expectations for stagnant economic growth have also risen sharply, climbing from 15% in April to above 30% this month. This shift comes amid growing concerns among market participants about the potential emergence of “stagflation,” characterized by stagnant growth combined with persistent inflation.
The latest findings from Chief Executive’s survey reflect a changing perspective among corporate leaders as they navigate the evolving trade landscape shaped by Trump’s tariffs. Many major corporations have maintained their earnings forecasts amid uncertainties regarding the final structure of the president’s trade policies.
Trump’s tariff proposals initially sent U.S. financial markets into a tailspin in April, raising apprehensions about possible impacts on consumer spending. However, his subsequent decision to suspend many of these tariffs allowed the markets to recover most of their losses.
In the interim, the White House has been engaged in negotiations with various countries, with the current pause in tariff implementation set to end early next month. Notably, the administration has secured an agreement with the United Kingdom and is set to engage in discussions with China in London on Monday.
Recession Talk
Discussions surrounding a potential economic slowdown have resurfaced prominently within corporate America. The term “recession” has appeared in around 150 earnings calls by S&P 500 companies this year, roughly double the number reported during the same time frame in 2024, according to analysis by Finance Newso based on FactSet data.
Michael DeVeau, CFO at International Flavors & Fragrances, expressed concerns during the company’s earnings call last month, stating, “We do recognize that sweeping changes in global trade policy could contribute to broader macroeconomic volatility, including the potential to tip certain regions into a recession.”
Businesses have raised alarms that tariffs could negatively impact their profit margins, compelling them to increase prices to cover higher costs. Some have highlighted that growing apprehension about a recession related to the tariffs has led consumers to adopt a more cautious financial approach.
Additionally, the University of Michigan’s widely monitored consumer sentiment index has seen a significant drop, nearing its lowest recorded levels, as the tariff announcements have unsettled American households.
Conversely, a recent survey by the New York Federal Reserve suggests a more optimistic view, indicating that the average consumer’s concerns about inflation are diminishing following Trump’s retraction on some of his more drastic trade proposals.
Edward Decker, CEO of Home Depot, remarked in a recent earnings call, “From the macro, the worst concerns, I think, have passed. We’ve gone from a dynamic where there was a near certainty of a recession and stock market correction in early April to a situation today where stock markets have fully recovered, and recession expectations have significantly declined over the past month.”
